Labour and investors, unite!

In the 21st century, southern African capitalism is a very different creature.

The end of apartheid clearly played a role, setting in motion tectonic political and economic shifts. The National Union of Mineworkers, now empowered by the backing of the governing ANC party, would flex its muscles, leading to the next wave of steady, above-inflation wage increases.

Ironically, the rise in living standards in the decade before the Marikana massacre may have been a fuel for protests, as workers found their improved circumstances provided unprecedented access to credit and, with that, the crushing obligation of debt.

This was a point I made three years ago when the NGO Mining Dialogues 360 provided me with previously unpublished data from a report it compiled for Lonmin.

One of the factors often cited to explain the rise of Amcu and the surge of militancy on the platinum belt was worker debt and the garnishee orders enforced for compliance. The narrative holds that this drove wage demands, with workers aiming for an increase that would achieve the dual objectives of bringing home more money while paying off debt.

But what came first: the debt levels or the pay hikes? One of the things the report made clear was that rock-drill operators at Lonmin – who became Amcu’s key base – were generally getting wage increases that exceeded inflation from 2003 to 2011.

And then an interesting thing happened – worker debt levels became more burdensome, not less, despite swelling income.

“The incidence of emolument attachment orders among Category 3-9 employees at Lonmin is relatively high and … has grown over the past five years from 12.6% in 2008 to 16.3% in March 2013,” noted the report.

What appears to have been unfolding – and this was not a conclusion drawn in the report – is that wage growth that accelerated beyond inflation provided many of these miners with, for the first time, a measure of disposable income. And when these miners suddenly had extra cash to spend, they were targeted by predatory lenders.

The broader point here is that the growth in worker debt before the massacre was a sign that real wage growth had already been taking place for years, while simultaneously being a catalyst for labour grievances.

In the decade since, mining wages have continued to upwardly outpace inflation. Commodity prices and a return to profitability in recent years have certainly helped. And Amcu, as Mathunjwa has claimed, no doubt played a role on this stage. With his charismatic blend of intense Christian faith, African nationalism and strident anticapitalism, Mathunjwa certainly commanded the attention of boardrooms.

But the Marikana massacre and its aftermath, including Amcu’s militancy and periodic bouts of violent labour unrest, had unintended consequences that also drove wage growth.